Singapore's latest GST Increase
It’s time to recuperate from the Covid-19
Singapore is now on a post-pandemic stage, but the effect of Covid19 on the economy is still on the mend. As of January 2022, the GST on all scales of goods and services is 7%, which changed from 5% way back in 2007.
After the cases of the Covid-19 infection surges, the government has to implement safety and health protocols to prevent the number of infections from increasing and protect vulnerable individuals. In effect, regular employers and businesses have to close down their establishments, reduce workers, and shift into work from home. The sales also declined due to insufficient sources of income of the consumers. The most significant two sources of tax revenue in Singapore were the corporates and personal income taxes, which now have a slow rate.
The 9% increase in GST was supposed to happen in 2018, but it was delayed due to the Covid19. Even with the postponements and higher expenditure, the government-supplied healthcare and different needs in times of the pandemic. They must take a few steps forward to refocus on fiscal sustainability and move to the budget increase, including the GST increase.
According to DBS Senior Economist Irvin Seah said on her interview, “The past two years of the pandemic has taken a huge toll on Singapore’s fiscal resources, and there is now an urgent need to refocus on fiscal sustainability,”
Meanwhile, UOB economist Barnabas Gan said, “This suggests that tax receipts including that of personal income, corporate and GST have not been enough to cover the rising expenditure costs,”
The yearly budget starts in April, and the Ministry of Finance, Mr. Lawrence Wong, will deliver the Budget2022 speech on February 18 at 3:30 PM in the Parliament. The speech will be aired on television and radio and published on the Singapore Budget website.
On the other hand, it is not only Singapore that has plans to mull taxes but also other countries such as the United Kingdom and Indonesia.